There's a Great Rotation underway in stocks. Here's what it means for investors.

Core Viewpoint - The stock market has recently experienced a shift from a tech-driven rally to a more diversified performance across various sectors, indicating a potential long-term change in market leadership [2][6][8]. Group 1: Market Dynamics - Major stock indexes have been reaching record highs, reminiscent of the Chicago Bulls' dominance in the 1990s [1]. - A significant concentration of gains has been observed in seven leading tech companies, particularly Nvidia, which is noted as the most valuable company ever [2]. - Following the recent Federal Reserve meeting, stock performance has diversified, with contributions from various sectors rather than a single dominant area [3][4]. Group 2: Economic Indicators - The Federal Reserve has raised its economic growth forecast for 2026 by 0.5 percentage points, which has bolstered expectations for continued economic expansion [5]. - This shift in market leadership is crucial for the sustainability of the bull market, and the upcoming jobs report will serve as a critical indicator of economic health [6]. Group 3: Sector Performance - Defensive sectors such as materials, healthcare, and financials have seen significant gains since the Fed's rate-cut decision, while tech sectors have lagged behind [3][4]. - A strong labor market report could reinforce the economic recovery narrative, favoring cyclically linked sectors in the market [6]. - Conversely, a weak jobs report might still support stock performance due to increased likelihood of further rate cuts, potentially allowing tech stocks to regain their previous dominance [7].